Interim Financial Statements for the Six Months Ended 30th June 2011

BALANCE SHEET

INCOME STATEMENT
BANK
For the Six Months ended 30th June
2011
2010 % Increase/
Rs. 000
Rs. 000 (Decrease)

BANK

GROUP

For the quarter ended 30th June

2011
2010 % Increase/
Rs. 000
Rs. 000 (Decrease)

For the Six Months ended 30th June

2011
2010 % Increase/
Rs. 000
Rs. 000 (Decrease)

For the quarter ended 30th June

2011
2010 % Increase/
Rs. 000
Rs. 000 (Decrease)

Income

18,007,210 17,480,079

9,269,492

8,983,479

19,618,170 18,568,683

6 10,105,383

9,576,156

Interest Income

15,392,822 15,055,150

7,840,950

7,509,164

15,585,909 15,179,773

7,937,801

7,576,576

Interest Income on Loans and Advances

Interest Income on other
Interest Earning Assets

13,009,810 11,803,499

10

6,708,764

5,907,307

14

12,903,645 11,643,466

11

6,654,665

5,827,835

14

2,383,012

3,251,651

(27)

1,132,186

1,601,857

(29)

2,682,264

3,536,307

(24) 1,283,136

1,748,741

(27)

Less: Interest Expense

Interest Expenses on Deposits
Interest Expenses on other
Interest Bearing Liabilities

7,527,367
6,481,619

7,614,848
6,813,618

(1)
(5)

3,956,976
3,399,806

3,690,681
3,300,723

7
3

7,575,670
6,477,793

7,651,071
6,810,328

(1) 3,980,047
(5) 3,397,814

3,712,419
3,299,042

7
3

1,045,748

801,230

31

557,170

389,958

43

1,097,877

840,743

31

582,233

413,377

41

Net Interest Income

7,865,455

7,440,302

3,883,974

3,818,483

8,010,239

7,528,702

3,957,754

3,864,157

2,614,388
526,649
2,087,739
10,479,843

2,424,929
422,620
2,002,309
9,865,231

8
25
4
6

1,428,542
250,205
1,178,337
5,312,516

1,474,315
239,412
1,234,903
5,292,798

(3)
5
(5)
-

4,032,261 3,388,910
529,196
424,052
3,503,065 2,964,858
12,042,500 10,917,612

19
25
18
10

2,167,582
251,425
1,916,157
6,125,336

1,999,580
240,117
1,759,463
5,863,737

8
5
9
4

6,502,148
2,416,154
461,732

5,814,532
2,306,369
443,992

12
5
4

3,268,870
1,217,099
219,645

2,956,639
1,157,559
221,990

11
5
(1)

7,783,537
2,665,605
468,028

6,707,129
2,530,829
449,652

16
5
4

3,942,412
1,332,771
222,927

3,400,809
1,283,438
224,928

16
4
(1)

1,471,614
41,437
85,944
2,025,267

1,377,242
611
83,278
1,603,040

7
6,682
3
26

750,190
37,983
41,288
1,002,665

702,868
611
41,622
831,989

7
6,117
(1)
21

1,393,986
41,437
92,466
3,122,015

1,281,221
611
88,998
2,355,818

9
6,682
4
33

710,136
37,983
44,609
1,593,986

661,068
611
44,260
1,186,504

7
6,117
1
34

(152,554)
(90,876)
176,579
(238,455)
198

59,423
32,590
209,926
(183,159)
66

(357)
(379)
(16)
30
200

(73,257)
(22,130)
94,467
(145,772)
178

10,041
42,898
93,158
(126,081)
66

(830)
(152)
1
16
170

(152,554)
(90,876)
176,579
(238,455)
198

59,423
32,590
209,926
(183,159)
66

(357)
(379)
(16)
30
200

(73,256)
(22,129)
94,467
(145,772)
178

10,043
42,899
93,159
(126,081)
66

(829)
(152)
1
16
170

(2,038)

(100)

(2,038)

(100)

4,672

1,087

330

4,672

(2,038)

(329)

4,130,249
687,402

3,993,314
1,102,571

3
(38)

2,116,903
371,971

2,328,156
630,364

(9)
(41)

4,406,845
687,402

4,149,973
1,102,571

6 2,251,508
(38)
371,971

2,454,923
630,364

(8)
(41)

3,442,847
3,442,847
1,126,893
2,315,954
2,315,954

2,890,743
2,890,743
1,098,448
1,792,295
1,792,295

19
19
3
29
29

1,744,932
1,744,932
562,236
1,182,696
1,182,696

1,697,792
1,697,792
558,271
1,139,521
1,139,521

3
3
1
4
4

3,719,443
(12,246)
3,707,197
1,165,412
2,541,785
27,944
2,513,841

3,047,402
(8,286)
3,039,116
1,150,665
1,888,451
18,383
1,870,068

22
48
22
1
35
52
34

1,879,537
(1,727)
1,877,810
575,702
1,302,108
9,581
1,292,527

1,824,559
(3,995)
1,820,564
587,468
1,233,096
12,765
1,220,331

3
(57)
3
(2)
6
(25)
6

6.48
6.45

5.07
5.05

28
28

3.31
3.29

3.22
3.21

3
2

7.03
7.00

5.28
5.27

33
33

3.62
3.60

3.45
3.44

5
5

Non- Interest Income

Foreign Exchange Income
Other Income
Less: Non - Interest Expenses
Personnel Costs
Provision for Staff Retirement Benefits
Premises, Equipment &
Establishment Expenses
Loss on Trading / Investment Securities
Amortization of Intangible Assets
Other Operating Expenses
Less: Provision for Bad & Doubtful Debts
and Loans written off
Provisions -General
Provisions -Specific
Recoveries(-)
Loans Written -Off
Provision Charged / (Reversal) for
decline in value of Investments (Net)
Operating Profit on Ordinary Activities
before Taxes
Less: Value Added Tax on Financial Services
Operating Profit on Ordinary Activities
before Corporate Tax
Share of Associate Companies Profit / (Loss)
Operating Profit before Corporate Tax
Less: Tax on Profits on Ordinary Activities
Operating Profit after Corporate Tax
Less: Minority Interest
Operating Profit for the Period

Basic Earnings per Ordinary Share (Rs.)

Diluted Earnings per Ordinary Share (Rs.)

E X P L A N ATO RY N OT E S
1. There are no changes in accounting policies and methods of computation since the publication of annual accounts for the year 2010.
2. There are no material changes during the period in the composition of assets, liabilities, contingent liabilities and use of funds raised through debentures.
All known expenditure items have been provided for.
3. These interim financial statements are presented in accordance with SLAS 35 Interim Financial Reporting and provide the information as required in terms
of Rule 7.4 of the Colombo Stock Exchange.
4. Where required, figures on the audited annual financial statements have been reclassified to conform to Central Bank of Sri Lanka publication requirements.
5. Details of Employee Share Option Plan (ESOP)
i. ESOP allocation 2010
Following options are outstanding from the options that were allotted in 2010.
Type of share
Number of
Number of
Number of
Number of
Option
Average
options
options
options
options
Exercise
Market
allotted
expired
exercised
remaining*
Price*
Value
Voting
2,231,526
Nil
41,516
3,284,930
111.00
305.70
Non voting
544,443
Nil
10,128
801,459
65.54
169.85
These options can be exercised within four years from the end of the retention period (ended on 18th April 2011) or at retirement, resignation or death whichever occurs first.

ii. ESOP allocation 2008

Following options are outstanding from the options that were allotted in 2008.
Type of share
Number of
Number of
Number of
Number of
Option
Average
options
options
options
Options
Exercise
Market
allotted
expired
exercised
remaining*
Price*
Value
Voting
343,139
Nil
283,008
90,194
77.03
305.70
Non voting
65,183
Nil
55,890
13,938
35.00
169.85
The outstanding options can be exercised within four years from the end of retention period (ended on 27th March 2009) or at retirement, resignation or
death which ever occurs first.
* The number of options remaining and the option exercise prices are adjusted for the sub division of shares on the basis of every two ordinary shares
(voting and non voting) being sub divided into three ordinary shares (voting and non voting) which took place on 5th April 2011.
6. The consolidated financial statements of the Bank cover the Bank and its subsidiaries HNB Assurance PLC, Sithma Development (Pvt) Ltd and Majan
Exchange LLC, the Groups interest in its associate company Delma Exchange and the Groups interest in Joint Venture Acuity Partners (Pvt) Ltd.
7. Shareholders approved the sub-division of shares recommended by Board of Directors on the basis of one ordinary voting share for every existing two
ordinary voting shares and one ordinary non-voting share for every existing two ordinary non-voting shares without making any changes to the Banks
Stated Capital at the Annual General Meeting held on 31st March 2011. This sub division took place on 5th April 2011 and the total number of shares, the
Directors and CEOs holding in shares and Number of shares of top 20 shareholders (voting and non voting) disclosed in these interim statements reflect
the position after the sub-division of shares.
The basic and diluted Earnings per Share (EPS) disclosed in the Income Statement has been adjusted for the said sub-division of shares. The net assets value
per share as at 31st December 2010 is restated based on the said sub-division of shares.

8. The Board of Directors initially recommended the issue of 71,507,870 new ordinary shares comprising 57,480,039 shares (voting) and 14,027,831 shares (non
voting) by way of a rights issue on the basis of one ordinary voting share for every existing five ordinary voting shares and one ordinary non-voting share for
every existing five ordinary non-voting shares (1:5) at the board meeting held on 9th May 2011. The new shares were priced at Rs. 219.50 per voting share and
Rs. 119.50 per non voting share. This was subsequently amended on 01st June 2011 and the Board of Directors recommended the issue of 35,753,936 new
ordinary shares comprising 28,740,020 shares (voting) and 7,013,916 shares (non-voting) by way of a rights issue on the basis of one ordinary voting share for
every existing ten ordinary voting shares and one ordinary non-voting share for every existing ten ordinary non-voting shares (1:10) and the prices at which
shares were to be issued remained unchanged. This resolution was approved by the shareholders at the Extra Ordinary General Meeting held on 1st July 2011.
Based on share holders response, the Bank had issued 21,858,851 shares on 1st August 2011 comprising of 19,020,702 shares (voting) and 2,838,149 shares
(non-voting).
9. Board of Directors have decided to dispose the Banks investment in Delma Exchange. Bank has a 20% investment in Delma Exchange amounting to
Rs. 83.674 Mn. Negotiations are under way to dispose this investment.
10. There are no material events that took place after the balance sheet date which require adjustment or disclosure in the financial statements other than as
disclosed in note 8 and 9.

S E L E C T E D P E R F O R M A N C E I N D I C ATO R S
As at
30.06.2011

As at
31.12.2010

As at
30.06.2011

Bank

As at
30.06.2011
Rs.' 000

As at
31.12.2010
Group

Assets Quality (Quality of Loan Portfolio)

20,993
23,667

22,658
26,060

22,162
25,356

23,587
27,391

9.13%

10.99%

9.25%

10.96%

10.30%

12.64%

10,58%
As at
30.06.2011

Gross Non-Performing Advances Ratio,% (net of Interest in Suspense)

Net Non-Performing Advances Ratio,% (net of Interest in Suspense and provisions)

12.73%
As at
31.12.2010
Bank

4.74%
2.68%

4.52%
1.96%

As at
30.06.2011

As at
31.12.2010
Bank

Profitability (Annualised)
Interest Margin, %
Return on Assets (before Tax), %
Return on Equity, %

4.76%
2.08%
16.67%
As at
30.06.2011

5.35%
2.32%
17.92%
As at
31.12.2010
Bank

Regulatory Liquidity
Statutory Liquid Assets, Rs. Mn
Domestic Banking Unit
Off-Shore Banking Unit
Statutory Liquid Assets, Ratio %
(Minimum Requirement 20%)
Domestic Banking Unit
Off-Shore Banking Unit

As at
30.06.2011
Rs.' 000

(Audited)

As at
31.12.2010 % Increase/
Rs.' 000 (Decrease)
(Audited)

ASSETS
Cash in Hand
Statutory deposit with Central Banks
Due from Banks and other Financial Institutions

6,071,760
14,311,265
3,933,141

5,840,537
12,491,644
13,919,073

4
15
(72)

6,105,634
14,325,486
5,790,504

5,866,503
12,506,052
15,811,801

4
15
(63)

Investments - Trading account

Government Securities
Other Securities
Investments - Held to Maturity
Government Securities
Other Securities
Less. Provision for decline in value of investment
Investments in Associates and Subsidiaries
Investments in Joint Venture Company

1,538,833
598,744
940,089
57,565,932
54,699,306
2,866,626
(14,363)
2,497,080
655,000

1,457,502
881,222
576,280
58,718,465
56,478,702
2,239,763
(14,363)
2,262,737
655,000

6
(32)
63
(2)
(3)
28
10
-

2,958,514
1,774,189
1,184,325
60,406,211
56,905,579
3,500,632
(26,863)
288,446
-

2,504,283
1,753,867
750,416
61,253,994
58,458,225
2,795,769
(26,863)
196,009
-

18
1
58
(1)
(3)
25
47
-

235,078,752
628,774
47,751,455
18,641,467
168,057,056

198,412,806
828,903
41,505,123
13,323,676
142,755,104

18
(24)
15
40
18

233,251,321
628,774
47,157,077
18,641,467
166,824,003

196,524,711
828,903
41,095,561
13,323,676
141,276,571

19
(24)
15
40
18

13,397,641
101,792
1,379,862
690,137
11,225,850
-

11,087,252
100,559
1,441,988
595,641
8,949,064
-

21
1
(4)
16
25
-

13,397,641
101,792
1,379,862
690,137
11,225,850
-

11,087,252
100,559
1,441,988
595,641
8,949,064
-

21
1
(4)
16
25
-

Total loans and advances

Total performing loans and advances
Bills of exchange
Overdrafts
Receivable on leases
Other Loans
Total non performing loans and advances
Bills of exchange
Overdrafts
Receivable on leases
Other Loans and advances
Interest Receivable
Total Gross Loans and Advances
Less:
Suspended Interest
Specific Loan loss Provision
General Loan loss Provision
Net Loans and advances

248,476,393

209,500,058

19

246,648,962

207,611,963

19

1,701,257
3,732,542
1,354,691
241,687,903

1,697,742
3,878,019
1,445,846
202,478,451

(4)
(6)
19

1,701,257
3,732,542
1,354,691
239,860,472

1,697,742
3,878,019
1,445,846
200,590,356

(4)
(6)
20

Other Assets
Intangible Assets
Investment Properties
Property, Plant & Equipment (net)
Total Assets

9,066,008
618,841
351,667
7,605,559
345,888,626

7,800,689
577,015
353,563
7,473,947
314,014,260

16
7
(1)
2
10

10,668,329
755,379
171,312
14,601,595
355,905,019

9,229,644
717,621
173,595
14,535,778
323,358,773

16
5
(1)
10

259,369,561
22,406,804
108,080,125
124,319,779
1,299,237
3,263,616

240,206,740
25,008,108
99,015,214
110,050,655
1,162,309
4,970,454

8
(10)
9
13
12
(34)

259,160,435
22,313,207
108,074,908
124,209,467
1,299,237
3,263,616

240,016,209
24,928,389
99,000,465
109,954,592
1,162,309
4,970,454

8
(10)
9
13
12
(34)

35,135,307
1,396,115

22,877,738
1,348,392

54
4

36,546,114
1,396,115

24,415,318
1,348,392

50
4

LIABILITIES
Total Deposits
Demand Deposits
Savings Deposits
Time Deposits
Margin Deposits
Other Deposits
Total Borrowings
Borrowings from CBSL
Borrowings from Banks and Financial
Institutions in Sri Lanka
Borrowings from Banks and Financial
Institutions abroad
Securities sold under repurchase agreements
Subordinate term debentures
Other borrowings

9,392,141

4,409,519

113

9,416,889

4,423,335

113

3,613,500
17,533,396
2,751,964
448,191

1,886,065
11,951,727
2,724,293
557,742

92
47
1
(20)

3,600,207
18,959,498
2,725,214
448,191

1,865,193
13,523,113
2,697,543
557,742

93
40
1
(20)

Insurance Provision - Life

Insurance Provision - General
Deferred taxation
Current taxation
Other Liabilities

797,127
3,126,225
19,067,529

735,884
3,127,622
19,792,509

8
(4)

2,740,427
850,950
796,684
3,290,040
20,485,741

2,385,246
730,658
734,376
3,258,984
21,251,282

15
16
8
1
(4)

317,495,749

286,740,493

11

323,870,391

292,792,073

11

5,362,091
1,510,000
21,520,786
28,392,877
28,392,877
345,888,626
151,440,572
6,476,016

5,318,550
1,510,000
20,445,217
27,273,767
27,273,767
314,014,260
118,327,580
5,842,970

1
5
4
4
10
28
11

5,362,091
1,510,000
24,421,393
31,293,484
741,144
32,034,628
355,905,019
151,440,572
6,476,016

5,318,550
1,510,000
23,149,558
29,978,108
588,592
30,566,700
323,358,773
118,327,580
5,842,970

1
5
4
13
5
10
28
11

Rs. 79.41
4,424
212

Rs. 76.40
4,352
205

Rs. 87.52

Rs. 83.98

Total Liabilities
EQUITY CAPITAL AND RESERVES
Stated Capital
Statutory Reserve Fund
Total Other Reserves
Minority interest
Total Liabilities & Shareholder's Funds
Contingencies
Commitments & Contra Accounts
Net asset value per share
No of Employees
No of Customer centers

C E RT I F I C AT I O N
I certify that the above financial statements are in compliance with the requirements of the Companies Act No. 7 of
2007 and give a true and fair view of the state of affairs of Hatton National Bank PLC and the group as at June
30,2011 and its profit for the six months ended June 30,2011.

(Sgd)
Ajantha de Vas Gunasekara
Chief Financial Officer
08th August 2011
We the undersigned, being the Managing Director / Chief Executive Officer and the Chairperson of Hatton National
Bank PLC certify that :
(a) the above statements have been prepared in compliance with the formats and definitions prescribed by the
Central Bank of Sri Lanka and Rule 7.4 of Colombo Stock Exchange.
(b) the information contained in these statements have been extracted from the unaudited financial statements of
the Bank, it's Associate, Joint Venture and Subsidiary Companies unless indicated as audited.
(Sgd)
Rajendra Theagarajah
Managing Director / Chief Executive Officer
08th August 2011

Regulatory Capital Adequacy

Core capital (Tier 1 Capital) Rs.Mn
Total Capital Base. Rs.Mn
Core capital adequacy Ratio,as % of Risk Weighted
Assets (Minimum Requirement, 5%)
Total capital adequacy Ratio,as % of Risk Weighted
Assets (Minimum Requirement, 10%)

GROUP

As at
31.12.2010 % Increase/
Rs.' 000 ( Decrease)

(Sgd)
Dr. Ranee Jayamaha
Chairperson
08th August 2011

S H A R E I N F O R M AT I O N
As at
Number of Shares
Voting
Non-voting
Last Traded Price per Share
Voting
Non-voting
For the Quarter Ended
Highest Price per Share
Voting
Non-voting
Lowest Price per Share
Voting
Non-voting

30.06.2011

31.12.2010

287,400,195
70,139,151

191,275,606
46,693,416

205.30
115.80

399.90
214.60

30.06.2011

30.06.2010

360.00
147.00

300.00
207.00

200.40
115.60

185.00
132.25

P U B L I C S H A R E H O L D I N G P E R C E N TAG E
57,525
7,930

58,138
6,341

20.48%
28.38%

22.92%
23.57%

As at

30th June 2011

Voting

68% approx.

Non-voting

96% approx.

Interim Financial Statements for the Six Months Ended 30th June 2011
S TAT E M E N T O F C H A N G E S I N E Q U I T Y
BANK

Stated Capital
Ordinary
Ordinary
Voting
Non voting
Rs.000
Rs.000

C A S H F LOW S TAT E M E N T

Statutory
Reserve Fund
Rs.000

Investment
Fund
Rs.000

Capital
Reserve
Rs.000

Reserves
General
Reserve
Rs.000

Income
Statement
Rs.000

Rs.000

Total

For the 6 months ended 30.06.2011

Balance as at 01.01.2011
3,113,130
Final Dividend 2010
Deferred Tax Liability for Revaluation Reserve
Shares Issued under ESOP
39,611
Transferred to Investment Fund *
Dividend Reversal **
Transfer of Revaluation Reserve for disposal of PPE
Net Profit for the Six Months
Balance as at 30.06.2011
3,152,741

2,205,420
3,930
2,209,350

1,510,000
1,510,000

386,643
386,643

3,024,969
3,308
(19,374)
3,008,903

13,000,000
13,000,000

4,420,248
(1,310,978)
(386,643)
67,285
19,374
2,315,954
5,125,240

27,273,767
(1,310,978)
3,308
43,541
67,285
2,315,954
28,392,877

For the 6 months ended 30.06.2010

Balance as at 01.01.2010
2,903,480
Final Dividend 2009
Deferred Tax Liability for Revaluation Reserve
Shares Issued under ESOP
113,525
Net Profit for the Six Months
Balance as at 30.06.2010
3,017,005

2,180,604
14,144
2,194,748

1,260,000
1,260,000

3,007,060
1,405
3,008,465

10,700,000
10,700,000

3,848,946
(1,179,806)
1,792,296
4,461,436

23,900,090
(1,179,806)
1,405
127,669
1,792,296
24,641,654

GROUP

Stated Capital
Ordinary
Ordinary
Voting Non voting
Rs.000

Statutory Investment
Fund
Reserve
Fund
Rs.000
Rs.000

Rs.000

For the 6 months ended 30.06.2011

Balance as at 01.01.2011
3,113,130
Final Dividend 2010
Deferred Tax Liability for Revaluation Reserve Shares Issued under ESOP
39,611
Transferred to Investment Fund *
Dividend Reversal **
Transfer of Revaluation Reserve for disposal of PPE
Exchange Loss on Translation of Financial
statements of Foreign Operations
Investment made by Minority
Share Holders in Rights issue
Net Profit for the Six Months
Balance as at 30.06.2011
3,152,741
For the 6 months ended 30.06.2010
Balance as at 01.01.2010
2,903,480
Final Dividend 2009
Deferred Tax Liability for Revaluation Reserve
Shares Issued under ESOP
113,525
Exchange Loss on Translation of Financial
statements of Foreign Operations
Minority Interest from additional investment
in subsidiary through Joint Venture
Reduction of reserves from disposal of
Associate company

Reserves
General
Exchange
Reserve Equalisation
Reserve
Rs.000
Rs.000

Capital
Reserve
Rs.000

Income
Statement

Minority
Interest

Total

Rs.000

Rs.000

Rs.000

2,205,420
3,930
-

1,510,000
-

386,643
-

5,791,791
3,308
(19,374)

13,000,000
-

2,744 4,355,024
- (1,310,978)
- (386,643)
67,285
19,374

588,592 30,566,701
(31,548) (1,342,526)
3,308
43,541
67,285
-

(1,622)

2,209,350

1,510,000

386,643

5,775,725

13,000,000

1,122

2,513,841
5,257,903

156,250
156,250
27,944 2,541,785
741,144 32,034,628

2,180,604
14,144

1,260,000
-

5,773,882
1,405
-

10,700,000
-

5,505
-

3,550,268
(1,179,806)
-

399,869
(22,500)
-

26,773,608
(1,202,306)
1,405
127,669

(809)

(645)

(1,454)

20,870

20,870

(13,594)

(13,594)

2,194,748

1,260,000

5,775,287

10,700,000

4,696

1,870,068
4,226,936

97,012
18,383
512,989

97,012
1,888,451
27,691,661

(94)

3,017,005

* Tax saving on the reduction of Financial VAT rate transferred to the Investment Fund as per the guidelines issued by the Department of Inland Revenue and Central Bank of Sri Lanka.
**Dividend reversal represent unpaid dividend for unregistered shares.

L I S T E D D E B E N T U R E I N F O R M AT I O N
Quarter Ended 30th June

HNB DEBENTURES 2002

10 year Fixed Rate (14.20% p.a.)
10 year Floating Rate (TB + 1.25% p.a.)
HNB DEBENTURES 2006
6 year Floating Rate (TB + 2.25% p.a.)
7 year Floating Rate (TB + 2.25% p.a.)
8 year Floating Rate (TB + 2.25% p.a.)
15 year Fixed Rate (11.00% p.a.)
18 year Fixed Rate (11.25% p.a.)
HNB DEBENTURES 2007
10 year Fixed Rate (16.00% p.a.)
15 year Fixed Rate (16.75% p.a.)

Market Value
2011
2010
Highest
Lowest
Highest
Lowest
Rs.
Rs.
Rs.
Rs.
N/T
N/T

N/T
N/T

N/T
N/T

N/T
N/T

N/T
N/T
N/T
N/T
N/T

N/T
N/T
N/T
N/T
N/T

N/T
N/T
N/T
N/T
N/T

N/T
N/T
N/T
N/T
N/T

N/T
N/T

N/T
N/T

N/T
N/T

N/T
N/T

Yield as at Last Trade Done

2011

Quarter Ended 30th June

HNB DEBENTURES 2002

10 year Fixed Rate (14.20% p.a.)
10 year Floating Rate (TB + 1.25% p.a.)
HNB DEBENTURES 2006
6 year Floating Rate (TB + 2.25% p.a.)
7 year Floating Rate (TB + 2.25% p.a.)
8 year Floating Rate (TB + 2.25% p.a.)
15 year Fixed Rate (11.00% p.a.)
18 year Fixed Rate (11.25% p.a.)
HNB DEBENTURES 2007
10 year Fixed Rate (16.00% p.a.)
15 year Fixed Rate (16.75% p.a.)

2010

N/T
N/T

N/T
N/T

N/T
N/T
N/T
N/T
N/T

N/T
N/T
N/T
N/T
N/T

N/T
N/T

N/T
N/T

RATIOS OF DEBT

Yield to Maturity of Last Trade Done (% p.a)

(Increase) / Decrease in Operating assets

Deposits held for Regulatory or Monetary Control Purpose
Loans and Advances
Other Short Term Assets
Increase / (Decrease) in Operating Liabilities
Deposits from Customers
Negotiable Certificate of Deposit
Other Liabilities

2010
Rs'000

14,405,259
(8,638,184)
480,462
(2,860,496)
(1,064,652)
3,171
(2,533,605)

15,617,428
(6,890,938)
1,773,416
(3,214,664)
(1,037,706)
2,313
(4,903,494)

14,616,969
(8,674,407)
1,354,117
(3,090,616)
(894,924)
3,171
(2,970,905)

681,385

(208,045)

1,346,355

343,405

669,991 (1,819,434)
(3,514,619) (39,119,398)
(96,139) (1,088,901)
(2,940,767) (42,027,733)

670,100
(3,632,361)
(1,532,986)
(4,495,247)

18,834,706
309,520
140,503
19,284,729

2,386,726
159,535
1,591,826
4,138,087

(425,293) (21,396,649)
(922,143)
(65,634)
(490,927) (22,318,792)

(13,755)
(98,606)
(112,361)

(1,819,621)
(39,058,734)
(934,920)
(41,813,275)

(21,788,004)
(917,142)
(22,705,146)

Cash Flows from Investing Activities

Dividend Income
Net Purchase of Dealing Securities
Net (Sale) / Purchase of Investment Securities
Purchase of Property, Plant & Equipment
Purchase of Intangible Assets
Improvements to Investment Properties
Disposal of Associate Company
Investment in Subsidiary Company by Acuity Group
Investment in Subsidiary Company by Bank
Proceeds from Sale of Property Plant & Equipment
Investment in Associates by subsidiary & joint venture company
Net Cash Flows Generated
from / (used in) Investing Activities

2,402,793
159,535
161,191
2,723,519

273,187
(98,821)
2,586,128
(538,303)
(128,174)
(393)
(234,320)
45,919
-

76,179
(781,132)
(5,475,455)
(368,055)
(5,762)
(1,752)
179,907
1,882
-

268,635
(405,921)
2,376,232
(551,785)
(132,640)
(393)
47,350
(103,661)

49,497
(643,044)
(5,802,192)
(386,653)
(16,050)
(1,751)
89,954
(319,104)
2,082
-

1,905,223

(6,374,188)

1,497,817

(7,027,261)

Cash Flows from Financing Activities

Increase / (Decrease) of Borrowings
Dividends Paid
Proceeds from Issue of Shares under ESOP
Proceeds from Issue of Shares to Minority share holders
Share Issue Expenses
Net Cash Generated from Financing Activities

12,229,898
(1,226,202)
43,541
(2,023)
11,045,214

2,260,614
(1,164,685)
127,669
(1,135)
1,222,463

12,103,125
(1,257,750)
43,541
156,250
(6,357)
11,038,809

2,255,562
(1,090,726)
127,669
20,870
(1,135)
1,312,240

Net Increase/ (Decrease) in Cash and Cash Equivalents

Cash and Cash Equivalents at the Beginning of the period
Cash and Cash Equivalents at the End of the period

(9,754,709)
19,759,610
10,004,901

(5,642,652)
28,241,295
22,598,643

(9,782,166)
21,678,304
11,896,138

(5,827,382)
29,137,947
23,310,565

DIRECTORS HOLDING AND CHIEF EXECUTIVE OFFICERS HOLDING IN SHARES

As at
30-Jun-2011

As at
31-Dec-2010

Dr. Ranee Jayamaha*

Mr. R. T. Wijetilleke**

7,806

Mr. R. Theagarajah***

32,729

21,820

Mr. D.H.S.Jayawardene

15,015

10,010

Mr. M.V.Theagarajah**

294,948

Mr. R.K. Obeysekere

15,015

10,010

Ms. P.C. Cooray

69,898

46,599

As at
31.12.2010
9.99
30.06.2010
16.67

2002 series 10 year maturity

7.68

9.57

2006 series 6 year maturity

7.40

9.54

Mr. Ranjeevan Seevaratnam**

2006 series 7 year maturity

7.77

9.75

Mr. N.G. Wickremeratne

2006 series 8 year maturity

8.25

9.82

Ms. M.A.R.C. Cooray

2006 series 15 year maturity

N/Q

N/Q

Dr. W. W. Gamage*

2006 series 18 year maturity

9.66

10.37

2007 series 10 year maturity

9.15

10.15

2007 series 15 year maturity

N/Q

N/Q

2010
Interest Cover (Times)

HNB DEBENTURES 2002

10 year Fixed Rate (14.20% p.a.)
N/T
N/T
10 year Floating Rate (TB + 1.25% p.a.)**
N/A
N/A
HNB DEBENTURES 2006
6 year Floating Rate (TB + 2.25% p.a.)**
N/A
N/A
7 year Floating Rate (TB + 2.25% p.a.)**
N/A
N/A
8 year Floating Rate (TB + 2.25% p.a.)**
N/A
N/A
15 year Fixed Rate (11.00% p.a.)
N/T
N/T
18 year Fixed Rate (11.25% p.a.)
N/T
N/T
HNB DEBENTURES 2007
10 year Fixed Rate (16.00% p.a.)
N/T
N/T
15 year Fixed Rate (16.75% p.a.)
N/A
N/A
** The yield to maturity calculation is not applicable for floating rate debentures.
N/T Not Traded as at 30th June

Yield of Comparable Govt. Security for the

following HNB Debentures (% p.a)

N/Q - Not Quoted as at 30th June

Name

500
2,000

150

20 MAJOR SHAREHOLDERS (NON-VOTING) - AS AT 30TH JUNE 2011

No. of Shares

Sri Lanka Insurance Corporation Ltd.(Life fund)

Employees Provident Fund
Milford Exports (Ceylon) Limited
Stassen Exports Ltd
Brown & Company Ltd A/c No.01
HSBC Intl Nom Ltd - SSBT-Janus Overseas Fund
Mr.Sohli Edelji Captain
Sonetto Holdings Limited
Distilleries Company of Sri Lanka Limited
National Savings Bank
HSBC Intl Nom Ltd - SSBT-Janus Aspen Series Overseas Portfolio
Standard Chartered Bank Singapore S/A HL Bank Singapore Branch
SBI VEN Holdings Pte Ltd
HSBC Intl Nominees Ltd-BBH-GMO Emerging Markets Fund
FI-CIBLUX S/A Batterymarch Global Emerging Market Fund
BNY-CF Ruffer Investment Funds:CF Ruffer Pacific Fund
The Ceylon Investment Plc - A/c No. 02
The Bank of New York Mellon SA/NV-CF Ruffer Total Return Fund
Deutsche Bank Trust Company Americas
Employees Trust Fund Board

3,000

* Appointed on 31st March 2011

** Resigned on 31st March 2011
*** Chief Executive Officer

20 MAJOR SHAREHOLDERS (VOTING) - AS AT 30TH JUNE 2011

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

GROUP
2011
Rs'000

2010
Rs'000

15,338,934
(6,842,635)
538,394
(2,958,917)
(1,104,602)
2,313
(4,292,102)

18,853,301
309,520
181,065
19,343,886

Net Cash Used in Operating Activities before Income Tax

Income Taxes Paid
Net Cash Used in Operating Activities

As at
30.06.2011
9.69
30.06.2011
20.14

Debt Equity Ratio %

2011

Cash Flows from Operating Activities

Interest & Commission Receipts
Interest Payments
Receipts from other Operating Activities
Cash Payments to Employees
Cash Payments to Suppliers
Recoveries of Loans Written-off in Previous Years
Cash Payments to other Operating Activities
Operating Profit before Changes in
Operating Assets & Liabilities

BANK

N/T Not Traded as at 30th June

N/T Not Traded as at 30th June

Quarter Ended 30th June

2011
Rs'000

(1,716)

Minority interest as at the date of acquisition of

subsidiary through joint venture

Net Profit for the Six Months
Balance as at 30.06.2010

For the 6 months ended 30th June

% on total capital

42,673,248
27,083,000
23,059,575
19,987,275
19,807,845
14,210,400
13,763,790
12,667,809
8,942,562
8,367,300
6,438,600
6,056,100
5,739,600
5,384,595
3,972,000
2,346,750
2,250,000
1,969,300
1,967,250
1,539,769

11.93
7.56
6.44
5.59
5.54
3.97
3.85
3.54
2.50
2.34
1.80
1.69
1.60
1.50
1.11
0.65
0.62
0.55
0.55
0.43

Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.

No. of Shares

Legalinc Trustee Services (Pvt) Ltd

Pershing LLC S/A Averbach Grauson & Co.
HINL-JPMCB-Butterfield Trust (Bermuda) LTD
Employees Trust Fund Board
Bank of Ceylon no. 01 Account
Mr.Yonmerrene Simon Hewage Indra Kumara Silva
National Savings Bank
HSBC Intl Nom Ltd - HSBC Securities Services Luxembourg-Halbis
Bank of Ceylon A/c Ceybank Century Growth Fund
BNYM SA/NV - The Walter Fund
Deutsche Bank AG-National Equity Fund
HSBC Intl Nominees Ltd-BBH-Gmoemerging Markets Fund
Waldock Mackenzie Ltd/Mr. H M S Abdulhussein
Hatton National Bank PLC A/c No. 02
Union Assurance PLC/ No.01A/C
Mellon Bank N.A.-Florida Retirement System
DFCC Bank A/c 1
Mr.Dickowita Kankanamge Weeratunga &
Mr.Dickowita Kanakanamge Athula Kithsiri Weeratunga
Deutsche Bank AG as Trustee for Namal Acuity Value Fund
The Bank of New York Mellon SA/NV-CF Ruffer Total Return Fund

% on total capital

13,699,910
2,809,650
1,755,150
1,464,795
1,187,550
1,053,663
975,000
674,250
653,000
649,950
600,000
541,336
513,650
507,957
506,850
505,650
496,400

3.83
0.79
0.49
0.41
0.33
0.30
0.27
0.19
0.18
0.18
0.17
0.15
0.14
0.14
0.14
0.14
0.14

450,090
450,000
420,000

0.13
0.13
0.12

S E G M E N T R E P O RT I N G
Banking

30th June
Total revenue from
external customers
Inter segment revenue
Total revenue
Segment result
Unallocated expenses
Profit from operations
Income from associates
Taxes
Minority interests
Net profit for period
Total assets
Total liabilities

Leasing

**Dealing

Property

Insurance

Elimination/Unallocated

Consolidated

2011
16,597,417

2010
16,431,041

2011
1,286,835

2010
872,164

2011
324,702

2010
231,863

2011
150,108

2010
45,850

2011
1,298,926

2010
1,046,061

2011
(39,818)

2010
(58,296)

2011
19,618,170

122,958
16,720,375
3,070,796
326,557,022
298,164,145

176,874
16,607,915
2,603,328
276,638,231
251,996,577

1,286,835
818,897
19,331,604
19,331,604

872,164
690,625
9,602,109
9,602,109

8,064
332,766
124,771
3,271,037
2,183,461

3,635
235,498
73,075
3,103,551
2,556,757

307,503
457,611
192,957
8,084,960
3,217,665

310,401
356,251
142,003
8,298,905
3,653,198

27,028
1,325,954
82,891
5,498,295
4,113,805

15,594
1,061,655
81,872
3,989,134
3,170,255

(39,818)
(40,553)
(6,837,899)
(3,140,289)

(58,296)
(59,182)
(6,452,646)
(3,491,273)

465,553
20,083,723
4,249,759
(530,316)
3,719,443
(12,246)
(1,165,412)
(27,944)
2,513,841
355,905,019
323,870,391

2010
18,568,683
506,504
19,075,187
3,531,721
(484,319)
3,047,402
(8,286)
(1,150,665)
(18,383)
1,870,068
295,179,284
267,487,623

Cash flow from operating activities (17,292,860)

Cash flow from Investing activities
1,905,223
Cash flow from financing activities 11,045,214

(287,461)
(6,374,188)
1,222,463

(5,412,286)
-

(203,466)
-

(61,980)
2,790
-

(93,491)
31,484
-

30,404
(8,263)
(162,520)

291,483
(327)
(62,520)

459,538
(847,540)
387,026

251,193
(254,109)
-

(41,608)
445,607
(230,911)

(70,619)
(430,121)
152,297

(22,318,792)
1,497,817
11,038,809

(112,361)
(7,027,261)
1,312,240

**Stock Broking, Security Dealings, Remittances and Foreign Currency Related Services.